POLITICS

Ontario Premier McGuinty says he only met ex-Ornge CEO Chris Mazza once

04/25/2012 09:53 EDT | Updated 06/25/2012 05:12 EDT
TORONTO - A prominent law firm with connections to Canada's most powerful political players collected almost $11 million from Ontario's troubled air ambulance service, which has since fallen under the shadow of a criminal probe, a legislative committee heard Wednesday.

The money trail has also reached the upper echelons of Ontario's Liberal party, forcing Premier Dalton McGuinty to clear the air about his connection to Ornge.

Fasken Martineau DuMoulin LLP billed Ornge for 22,000 hours from 2003 until 2012 — the equivalent of three years straight, 24 hours a day, seven days a week.

Prime Minister Stephen Harper's former chief of staff Guy Giorno, former Liberal party president Alfred Apps and Lynne Golding, who is married to cabinet minister Tony Clement, were among the team of lawyers who provided advice to Ornge, the committee heard.

The firm's work included advising Ornge on setting up a web of for-profit subsidiaries, compensation for its executives and whether the organization needed to disclose the $1.4 million paid to ex-CEO Chris Mazza — all of which have come under fire from Ontario's auditor general.

The auditor's March report criticized the governing Liberals for giving Ornge $730 million over five years with virtually no oversight of how the money was spent.

The government is currently winding down Ornge's web of for-profit companies that the auditor said used taxpayer dollars to make "questionable" business deals and shielded executives from publicly disclosing their high salaries.

Golding called Mazza's compensation "outrageous" but said she didn't provide legal advice about how much he should be paid.

She also provided documents that disclosed Fasken's billings to Ornge and its for-profit companies. The total amount of $11.2 million included $9.5 million in legal fees, as well as costs and taxes.

However, Fasken has yet to collect $447,870 from Ornge subsidiaries that are now in bankruptcy.

Don Guy, McGuinty's former chief of staff and longtime campaign guru, also billed Ornge $107,887 between May 2008 and December 2011 for his services. Guy left McGuinty's office in 2007 and formed his own consulting firm, but served as McGuinty's campaign director in last fall's election.

Apps told the committee last week that he contacted Guy twice to "make sure we were anticipating and thinking about the issues from the government's perspective appropriately."

But the Opposition Tories say Apps' and Guy's work for Ornge raises questions about whether there was unregistered lobbying done on its behalf.

They demanded that McGuinty explain a letter drafted by Apps that advised Mazza not to mention that he met the premier at a reception.

McGuinty said he met Mazza once in October 2005, when he flew up to Sudbury to visit residents of the remote First Nations reserve of Kashechewan who were evacuated during the tainted water crisis.

"The person who guided me as part of a tour through the emergency medical assistance team tents was one Chris Mazza," McGuinty told the legislature. "That's the only connection with Chris Mazza."

Critics have questioned why it took the government so long to rein in Ornge, given that the Health Ministry received the auditor's draft report last September when the election campaign was in full swing.

Health Minister Deb Matthews has long maintained she was misled by Ornge management and "handcuffed" by rules that prevented her from acting sooner. At first she blamed the government's toothless performance agreement with Ornge, then said she was powerless because Ornge was a federally registered charity.

But Golding said the government was consulted during the lengthy process of drafting the agreement and did have the tools to bring Ornge to heel.

"If the ministry believed that Ornge was not complying with the agreement, but did not want to terminate the agreement for fear that they would create further risks to patient safety, the ministry could have issued a notice of default or threatened to do so," she said.

"That usually gets the attention of a grant recipient."

Former Ornge chairman Rainer Beltzner, who resigned in January amid the scandal at Ornge, said the board told management not to use any public dollars for operations of the for-profit entities.

However, he confirmed that the board approved a budget that included Mazza's sky-high compensation and also approved loans that Mazza used to buy a home. The government is now trying to recover the loaned money.

Beltzner, who received $200,000 a year to sit on Ornge's board, also confirmed that his daughter, Carrie Anne Brunet, worked as a junior executive at Ornge. He said she got the job by answering a job ad in the newspaper.

Brunet reportedly helped work on a controversial marketing services agreement with Italian helicopter firm AgustaWestland, which paid an Ornge subsidiary controlled by Mazza $6.7 million shortly after Ornge bought 12 of its helicopters in 2008 for $144 million.

The "insinuation and allegation" that the money was a kickback is "insulting to me professionally and to my company," AgustaWestland executive Louis Barlotta told the committee last week.

A rare Speaker's warrant has been issued ordering Mazza to appear before the committee on May 16.

If he doesn't show up, the committee could ask the elected members of the legislature to take action.